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Question: Negotiated Transfer Prices The Lighting division of Ibex Office Furniture needs 1,200 units of a leaded-glass lamp shade from the fabricating division. The company has a policy of negotiated transfer prices. The fabricating division has enough excess capacity to produce 2,000 units of the lamp shade. Its variable cost of production is $23. The market price of the lamp shade to external customers is $39. What is the natural bargaining range for a transfer price between the two divisions? Explain why no price below your range would be acceptable. Also explain why no price above your range would be acceptable.
Two firms face the demand equation given by P=200,000 -6(Q1 + Q2) where Q1 and Q2 are the outputs of two firms. The total cost equations for two firms are given by: TC1 = 8000Q1 and TC2 = 8000Q2.
suppose all firms in a perfectly competitive industry have the same short run labour demand curves. under what
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